If you know the unit prices of two different brands of an item, you are better able to:

Creative Sound Systems sold investments, land, and its own common stock for $32.0 million, $14.8 million, and $39.6 million, res

Studentka2010 [4]

Answer:

Creative Sound Systems should report $18,800,000 as net cash flows from financing activities

Explanation:

Cash flow Financing activities are the funds that the business acquire or paid to finance its main activities, these involve borrowing and repaying short-term loans, long-term loans and other long-term liabilities.

From the question, Cash inflow from Issue of common share and Cash outflow from purchase of treasury stock are the only recognizable Financing activities

Particulars Amount

Cash inflow from Issue of common share $39,600,000

Cash outflow from purchase of treasury stock -$20,800,000

Net cash flows from financing activities $18,800,000

7 0

3 years ago

Yappy Company is considering a capital investment of $320,000 in additional equipment. The new equipment is expected to have a u

Eddi Din [679]

Answer:

a. 4.92 years

b. NPV = $26,770.20

c. 1.0837

d. IRR = 12.26%

e. 15.6%

the project should be accepted

Explanation:

Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows

Payback period = Amount invested / cash flow = $320,000 / $65,000 = 4.92 years

Net present value is the present value of after tax cash flows from an investment less the amount invested.

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

NPV and IRR can be calculated using a financial calculator

Cash flow in year 0 = $-320,000

Cash flow each year from year 1 to 8 = $65,000

I = 10%

NPV = $26,770.20

IRR = 12.26%

profitability index = 1 + (NPV / Initial investment) = 1 + ($26,770.20 / $320,000 ) = 1.0837

The project should be accepted because the NPV and profitability index are positive. the IRR is greater than the discount rate. this means that the project is profitable. Accounting rate of return = Average net income / Average book value

Average book value = (cost of equipment - salvage value) / 2 = $320,000 / 2 = $160,000

$25,000 / $160,000 = 0.156 = 15.6%

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.

7 0

3 years ago

True or False: If Hubert's Fire Engines were a competitive firm instead and $100,000 were the market price for an engine, decrea

KatRina [158]

Answer:

False

Explanation:

In a perfectly competitive market the sales revenue is based on pricing also. As the pricing policy also plays an important role in the marketing technique to attract customers.

As the quality served is generally the same in the market, there is no issue in that but when the price is reduced expected sales will increase and accordingly the expected revenue also increases.

As the sales is expected to increase the revenue will also increase accordingly, even though the price is reduced, due to increase in sales quantity the expected change shall not be same as that of the change in price.

Thus, the statement is False.

5 0

3 years ago

The financial statements include an introduction known as the management discussion and analysis. This preface must contain info

Elis [28]

Answer: Analysis of company's performance by the management.

Explanation: In the management discussion and analysis, the upper management of the company analyze and comment on the qualitative and quantitative characteristic of a company. This is seen as a secondary information in the company's yearly financial statement.

The MD and A, is considered valuable by investors as sometimes the management also comments about the upcoming projects of the company in such statements.

3 0

3 years ago

As the price of a resource decreases, _____. a. the supply of that resource increases b. producers are more willing and able to

solmaris [256]

Answer:

b. producers are more willing and able to hire that resource

Explanation:

In production resources are defines as various inputs in the production process of a product.

It contributes to the final product that a consumer buys and they have their various costs which are used to obtain their use.

So when the price of a resource decreases, it means that the cost of production also decreases.

There is now more outlay of cash that can be used hire that resource.

Producers are able to produce more of the final product so supply increases.

6 0

3 years ago